Canada’s metropolitan luxury real estate markets continue to reflect unprecedented circumstances leading into fall 2021. Following record-shattering sales across major markets through the first half of 2021, pandemic-related influences continue to motivate consumer housing activity, driving new demand for urban real estate as downtown cores revitalize and consumer confidence in higher density, city living continues to rise. However, the supply of available top-tier real estate is deficient in relation to housing needs, constraining sales across multiple market segments, limiting housing mobility, and accelerating price gains as a result. With an unsatiated undercurrent of demand across every major market and a new wave of prospective real estate consumers imminent, rising prices and steady activity are forecasted for fall.

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New data compiled by Sotheby’s International Realty Canada reveals that the Greater Toronto Area (GTA) is positioned to see continued price acceleration in an active fall market, even as the region’s acute shortage of conventional and luxury housing supply caps overall activity. An unexpectedly active summer resulted in residential real estate sales over $4 million rising 12% year-over-year in July and August 2021, with six ultra-luxury properties sold over $10 million compared to four properties sold in this price range over the same months in 2020. As in other major metropolitan markets, the GTA luxury condominium market strengthened as confidence in urban living continues to rise. As a result, sales of luxury condominiums over $4 million were up 40% year-over-year to seven units sold in the GTA in July and August, with one ultra-luxury unit selling over $10 million on MLS compared to a lack of transactions in this price range in the summer of 2020. This outpaced the percentage gains experienced in luxury single-family home sales over $4 million, which saw a 15% year-over-year increase from the summer months of 2020. Residential sales over $4 million between September 1–15 reflect underlying consumer demand for premier real estate leading into fall, as sales increased 33% year-over-year.

Vancouver’s luxury market is poised to see some relief from the extraordinary pace and price gains experienced over its prolonged sellers’ market but continues to confront the challenges of the region’s chronic and significant deficit of conventional and high-end housing supply. Overall residential sales over $4 million increased 13% year-over-year in July and August 2021, with one ultra-luxury property sold on Multiple Listing Service (MLS) over $10 million during this time. Top-tier condominium sales also strengthened as confidence in city living revived; summer sales over $1 million increased 22% year-over-year, while luxury condominium sales over $4 million remained steady at 2020 summer levels with nine units sold. At the same time, luxury single-family home sales over $4 million increased 14% year-over-year in July and August, while one home sold over $10 million on MLS compared to three in the summer months of 2020, reflecting sellers’ increased requirements for privacy. A new real estate record was set for Greater Vancouver during this time, with Sotheby’s International Realty Canada’s exclusive sale of the highest-priced single-family residential sale on a single lot in the region’s history. Residential real estate sales over $4 million in the first 15 days of September reflected a delayed start to the fall market, as well as the forthcoming challenges of inventory shortages for increasingly frustrated and hesitant buyers. $4 million-plus residential sales declined 68% year-over-year, with none of these selling above $10 million compared to one ultra-luxury above this price point on MLS in the same period of 2020.

Montreal experienced a fleeting seasonal sales slowdown as consumers and the industry briefly withdrew from a heated sellers’ market that set new records through the first half of 2021, but the brevity of this lull and the market’s swift rebound of luxury sales in early fall points to a dynamic and active season ahead. In face of strong consumer demand, the city is set to face the twin challenges of a significant provincial deficit of conventional and luxury housing, and price acceleration in turn. Over July and August, residential real estate sales over $4 million were up 50% year-over-year; while $1 million-plus sales contracted 17% over the summer months, they were up 26% year-over-year in the first 15 days of September. Three luxury sales took place over $4 million between September 1–15 where there had been no transactions of this magnitude in the same period last year. The summer seasonal slowdown resulted in single-family home sales over $1 million declining by 24% year-over-year in July and August, even as $4 million-plus sales increased 40%, before resurging in the first weeks of September. Montreal’s luxury condominium market has been experiencing striking gains: sales over $1 million were up 30% year-over-year over in the summer months and jumped 125% year-over-year in the first 15 days of September, signalling strength in this sector in the fall ahead.

Calgary’s luxury residential real estate market, which had gained steady traction since the start of the year, evolved into a true sellers’ market over the summer and is poised for more balanced market conditions this fall. With the recovery of the oil and gas industry and provincial economy, as well as the re-opening of the province, strengthening consumer optimism, residential sales over $1 million increased 50% year-over-year in July and August. The city’s market-dominant single-family home segment saw sales over $1 million increase 53% year-over-year during this time; meanwhile, condominium sales over $1 million in this well-supplied segment saw sales double from previous year’s levels to six units sold over the summer months.



Severe Inventory Deficit Sparks Price Gains, Undermines Sales
A severe shortage of conventional and luxury inventory across Toronto, Vancouver and Montreal undermined potential sales across the conventional and luxury markets for condominiums, attached, and single-family homes, and will continue to thwart transactions this fall. Calgary, which tipped into true sellers’ market conditions over the summer months and saw diminished supply sparking bidding wars for premier single-family homes, is projected to experience more balanced conditions.

Frenetic sellers’ markets that drove luxury residential sales over $4 million up year-over-year by 276% in the GTA, 152% in Vancouver, and 133% in Montreal over the first half of 2021, incited heated bidding wars that increased housing prices to historic highs. Sales tapered briefly over the summer as frustrated and fatigued home buyers withdrew from the market, while prospective sellers reconsidered the challenges of navigating market conditions that offered limited choices should they place their home on the market. The lulls in these markets were brief and masked underlying consumer demand.

Activity has resurged in the preliminary weeks of fall. While a balanced market is anticipated for Calgary, extreme demand-supply housing imbalances across Toronto, Vancouver and Montreal are deeply embedded. This is now revealing itself in increased activity in the comparatively accessible top-tier condominium market, buyer fatigue and hesitancy, market conditions that almost universally skew in favour of sellers, and continued price gains in the months ahead.

Return to City Living Ignites Urban Sales & Condominium Demand
Although the pace of recovery was uneven across major metropolitan markets, most Canadian jurisdictions had near-final stages of public health reopening plans in place by August 2021, with restaurants, entertainment venues, retail and personal service businesses, and recreational facilities generally open at varying capacity requirements. Furthermore, non-essential travellers from the U.S. who were fully vaccinated were permitted to enter the country without quarantine requirements as of August 9, expanding business vitality in downtown areas. With broadening immunization coverage increasing public confidence, city centres and downtown cores re-energized at a faster pace than any point in time since the pandemic’s inception in March 2020.

As a result, demand for luxury real estate in the heart of Canada’s major urban centres has increased more steeply, most notably, in the market for high-end condominiums. This has been further magnified by the shortage of single-family and attached home supply, and resulting affordability challenges, which are compelling prospective buyers across every generation into condominiums out of necessity. In recent months, across every metropolitan market, top-tier condominium sales activity has exceeded industry projections and contradicted anticipation of a seasonal summer slowdown. In the GTA, which has seen demand for luxury condominiums steadily increase since the start of 2021, sales of luxury condominiums over $4 million were up 40% year-over-year in July and August. Montreal’s luxury condominium sales surpassed optimistic industry expectations over the summer months, as $1 million-plus sales increased 30% year-over-year, with $4 million-plus condominium sales remaining consistent. Similarly, sellers’ market conditions were sustained in Vancouver’s top-tier condominium market through the summer, as sales over $1 million increased 22% year-over-year and luxury condominium sales over $4 million remained on par with 2020 levels. Calgary’s conventional and luxury condo market, with ample supply that heavily skewed the market in favour of buyers for several years, saw a noteworthy increase in luxury activity: in July and August, $1 million-plus condominium sales doubled from previous year’s levels, and consumer and investor enquiries rose significantly.

With post-pandemic urban life reinventing itself, revitalized consumer and investor confidence positions every major metropolitan luxury condominium market for steady gains this fall.

Job Gains Bolster Top-Tier Real Estate Sales
Steady, albeit uneven, gains in the Canadian job market have supported positive consumer confidence across the conventional and luxury housing market. Employment rose for a third consecutive month in August 2021, up 0.5% year-over-year, while the unemployment rate fell by 0.4% to 7.1%, the lowest rate since the pandemic’s start. During this time, unemployment rates fell in every major metropolitan real estate market. Vancouver’s August unemployment rate saw the most dramatic decline as it fell to 7.1% (down 5.9% year-over-year), while Montreal’s unemployment rate fell to 7.0% (down 4.9% year-over-year). Although unemployment rates in Toronto and Calgary remained above the national average, they also decreased to 9.3% in Toronto (down by 4.7%) and to 9.6% in Calgary (down by 4.8%).

Although the economic and labour market recovery remains deeply unbalanced, its improvement, particularly for mid/high wage sectors has bolstered confidence and will continue to support the recovery of Canada’s conventional and luxury housing market in the months to come.

Gap Between Luxury and Conventional Housing Trends Widen
The impact of the pandemic has differed across Canada’s housing markets and property types; however, a defining factor has been the extraordinary demand for luxury real estate relative even to the heated demand for conventional housing. Steep gains in luxury sales have been attributed to significant shifts in consumer housing needs with the pandemic, and the increased willingness and capacity for affluent home buyers to invest in housing necessities and luxuries. Over the course of 2021, this has resulted in several historic, record-breaking sales, including Sotheby’s International Realty Canada’s sale of the highest-priced condominium in Québec’s history in Montreal, and its recent sale of the Greater Vancouver region’s highest single-family residential sale on a single lot.

According to Sotheby’s International Realty Canada experts, the gap between luxury and conventional consumer market behaviour and trends is set to widen. On one hand, luxury real estate consumers will continue to drive new levels of activity in the metropolitan and recreational housing markets to fulfill post-pandemic lifestyle needs and tastes. Extensive luxury home renovations, as well as elevated luxury amenities and finishings driven by this consumer group will permanently transform luxury housing stock and place upward pressure on future high-end real estate prices. This cohort will also be at the forefront of accelerating intergenerational wealth transfer into the single-family home market. At the same time, the desire for elevated levels of privacy and discretion amongst this cohort, will shift an increasing number of ultra-luxury transactions to exclusive global sales and marketing networks.

At the same time, first-time buyers and conventional housing purchasers face increasing barriers, particularly in the single-family home market, given rising prices, tighter mortgage qualification criteria and the risk of eroding buying power given recent inflation. Sotheby’s International Realty Canada continues to underscore the urgent need for new housing supply across the rental, vertical, low-density and high-density spectrum to support residential mobility, and to ensure housing affordability for more Canadians.


The information contained in this report references market data from MLS boards across Canada. Sotheby’s International Realty Canada cautions that MLS market data can be useful in establishing trends over time but does not indicate actual prices in widely divergent neighborhoods or account for price differentials within local markets. This report is published for general information only and not to be relied upon in any way. Although high standards have been used in the preparation of the information and analysis presented in this report, no responsibility or liability whatsoever can be accepted by Sotheby’s International Realty Canada, or Sotheby’s International Realty for any loss or damage resulting from any use of, reliance on or reference to the contents of this document.


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